Tesco, a multinational retailing company, entered into a joint venture with the Samsung Group as part of its start-up strategy in South Korea under a new brand called Home Plus. The company moved to administer regulations that would help in the local operation of the business but, at the same time, it adapted business policies from Tesco's British office. Over time, the local retailing businesses in Korea have developed, and, as such, the company was faced with intense competition within the local market industry. With this challenge, the company must re-assess its position to work its way through this kind of environment.
Youngwoo Lee; Martin Hemmert
Harvard Business Review (W13140-PDF-ENG)
April 19, 2013
Case questions answered:
How can Home Plus grow when facing many threats, including socio-economic, competitive, political, and legislative issues?
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Case answers for Home Plus: Riding the Korean Retailing Rollercoaster
Executive Summary – Home Plus: Riding the Korean Retailing Rollercoaster
Given that the global economic recession and price inflation for public goods has caused a decrease in consumer’s disposable income, Home Plus needs to pursue new strategies to maintain its growth in the future of the South Korea retail market under huge pressures— aggressive competitors, the growing opposition of small store owners, harmful potential pending legislation, consumers’ changing behavior and the bargaining power of manufacturers.
After evaluating the three alternatives, it is recommended that the company start the online business by working with popular chatting APPs, Line and Kakao, create their own online-shopping App and provide home delivery services.
Alternative 1: Offer small local stores partnerships
Due to the fact that small local store owners are protesting against Home Plus SSM, they are the main threat to the existence of SSMs. Offering the small local store owners partnership to be part of SSM is a…